Pullback trading How to trade pullbacks like a pro

hey hey what's up my friend welcome back to today's training video you're going to be learning all about trading pool backs right you learned one of the pros and cons of trading pull backs you even know where is the likely place on the chat where the market will pull back into and finally you'll learn three different entry techniques that you can use to enter on a pullback so are you ready then let's begin so what is a pullback a pullback looks something like this right if you have an uptrend then the move that is against the underlying trend like this over here this over here and this over here are known as pull backs in the market right so basically if you are you're talking about trading pull backs you're basically entering the trade as the market has traded at a lower price in an uptrend so the pros and cons of pullback is this right the process that you know you're basically buying low and selling high right if you are trading pullback in an uptrend you're basically buying look and you are selling pullback in a downtrend you are basically selling high and the second thing about this is that it is actually easier on your psychology when you are trading pullback and the reason being is they know you're basically trading from an area of value right because buying low and selling high is something that we all are very accustomed to right because when we are going to the supermarket or we buy our stuff we always want to buy low and sell high so pullback basically represents the opportunity to buy low and sell high and the downside of it is that you may miss the move right let me explain why for example you know in an uptrend it consists of higher highs and higher lows right so okay not too good let me redo this one small right in an uptrend for higher highs and higher lows so let's say price is pulling back right now and let's assume you are hoping that price could you know perhaps retest back these lows over here so you're looking to go long at this lows over here but what but in the market is that price doesn't pull back deep enough and then when and treat higher without you soin up causing you to miss the move so this is the biggest downside in trading pullback is that sometimes you may actually miss the move or waiting for price to come to your desired level now once you've embraced write about the pros and cons of trading pull backs the next question you probably have is you know hey Raina where will the pullback in okay so I want to share with you three scenarios where I find that you know the pullback would usually end in you know either one of these three particular scenario number one it tends to respect support or resistance right support in an uptrend and resistance in a Down trip number two it tends to respect a moving average and number three a trend line let me explain right so you can see that this chart over here doesn't matter what time frame or or what market this is right this these are pretty much Universal rules or universal principles then you can apply okay so you look at this chart this is an area of resistance right price broke out of it and any pullback where did it pull back into previous resistance Mountain support alright then price really higher once more and any pullback once again ready pull back into previous support right then it creates higher right breaking out above this highs over here and then it pulls away right it pulls back and where did it pull back into it pull back into previous resistance mountain support right and then it rates higher once again alright so this is an example right of price pulling back into an area of support in an uptrend and this is just vice versa for down train the next thing that the market could potentially pull back into is back towards the moving average right in this example the red line here is the tweeny period moving average the blue line is the 50 right so it tends to pull back into the 20 and 50 period moving average right so again right this this is just a very cherry-pick example right I'll admit right because there are times where the market will respect the hundred period moving average or the 200 so this is something that you probably have to be more proactive and to to notice right then in this market condition which moving every is more applicable or whether is even applicable or not so moving on another thing that a market would respect is a trendline so you can see over here price you know trades higher comes in lower traits higher returns back this trendline so yeah at this point you have two touches right one touches one touch to touch so the touch is something that you could actually pay attention to let me trade tire come back by just not close enough right so recall earlier the cons of trading pullback is that sometimes the market may trade without you right so this is one example if you were to be waiting for price to come towards this area of trendline you have missed this move higher then they come back lower retest the trendline trades higher then it trades lower in start to hug the trendline all the way here and then it breaks out higher once again so this is it right these are the three particular scenarios where the market tends to pull back in two and now comes the important question which is how do you treat pullback right so there of course you know many many different ways to treat pullback but I just want to share with you three very practical ways that you can consider trading pullback so because I find that these three approach is very sound and logical to me number one candlestick pattern right you can look for a reversal candlestick pattern like the pin bar game golfing pattern right as sort of a confirmation right B to share with you to tell you that the market is about to continue into the direction of its string number two we can look for a break of a trendline before you enter the tree and number three you get rid for a break of structure on the lower timeframe let me explain for example take this chat as a reference right the first way you can look to trade it is recall we talked about candlestick pattern so if price has pullback to an area of value in area where you think the market will reverse from so you can start to look for your reversal candlestick pattern before you enter a trade right for example you have this bearish engulfing pattern over here and before price you know tree the lower this is another well it's not really a very bearish candle but nonetheless it engulfs the body of the previous candle right then you have another one over here not a bearish engulfing right a bearish pinbar here and not a bearish engulfing candle over here so mind you this is obviously a cherry-pick chart right I cherry-pick this chat not to show you that this method is the best but rather is to illustrate my point because if you have a well picture it is much easier to illustrate the point I'm trying to put across but I hope you understand that trading is definitely there's no such thing as 100% win rate right there will be winners and losers no matter what your trading strategy is right no matter what your trading strategy is right so don't get misled about you know this current chatter I'm showing you right now right the reason why it seems to work really well is because we are in a clear downtrend right once you when you have a very clear downtrend you realize that no matter what entries you use all right chances is that is going to you know make you money as well so you don't believe me right this was the candlestick entry day you can consider or how about the trendline right you look for a break of trend line we can draw a trend line all right when price break the trend line you go go shot again it works right now the one over here you can draw this trend line it breaks you go shot again it works and this one over here and this one over here so hope you get my point now is that no I'm just trying to illustrate you the different ways that you can consider entering on a pullback but don't be mislead but thinking I know this is such a very you know high winrate strategy right is it's definitely not the truth and it's something that you have to be prepared for I have to be prepared for losses right no matter what approach you use okay so for this the trend line example right how you go about creating it is when price break and close below the trend line you can look to go shot this market right a break and close below the trend line look to go shot and again right so pretty much the same but for this over here I look at this a strong bearish close you probably you know go shot at a very low level this is a trade of you possibly want to consider skipping all together okay so the last thing I want to share with you is a what I call the break off lower the break of structure on the lower timeframe so let me explain this so let's say for example prices come into this our area of value right see some way over here so what you can do is that this is the forward timeframe you can go down to a lower timeframe like the one-hour time frame and we for a break of structure to signal to you that the trend is about to go back into its original direction so let me show you so you go down to the one-hour time frame and this is the same portion we saw earlier on the higher time frame the follower you saw that the consolidation is dispute this one over here actually so how you go about doing it is it you start to observe the structure of this market right you notice that the retracement consists of you know higher highs and higher lows right you have higher highs higher highs sorry higher lows higher lows higher lows higher high higher height right then at this point things starts to change you know based on the structure of the market right notice that you have a lower high and a lower low so once you have a lower low in a low high is telling you they don't possibly that this market that this retracement is coming near towards its end then if you look to go shot this market when price breaks below this low over here right so this is what I mean by you know a break of structure on the lower timeframe so these are basically the three different ways three different methods that you can use to enter on a pullback so now the next question is you know arena what about stop losses right how do you actually do manage just stop losses right so the most logical area to set your stop loss is number one above the swing high right since this is a downtrend right above the swing high would be a logical approach if you want to be more conservative right you can actually use the previous swing high as well so instead of putting a stop loss above this high you can use this high instead so this is something that is a notice personal it really depends on your own personality and you know your attitude towards risk itself right so with that right I pretty much just want to give you a heads up into the things to look out for when you're trading pullback and what I'm like what are the options that you have as well right when you're trading for bet so just a recap to what you have learned in today's video the one is that you learn what is a pullback and the pros and cons of trading pullback right the process that you know pullback basically allows you to trade from an area of value so this allows you to know buy low and sell high and because of the fact that you can buy low and sell high I believe that it is easier on you psychologically to execute pullback tricks because I mean we are humans right we always want to buy something cheap something low every one to sell as high as possible so from a psychological standpoint right pullback training is easier to execute and the downside that I talked about is that pullback trading sometimes will lead you to miss moves in the market right because sometimes the market just doesn't pull back to your desired level and you will just take off without you I think this is worth repeating right say for example this is an uptrend and the market pulls back let's say this is an area where you expect the price to push back into before you get long but what happens the market just takes off without you and you miss the move right it doesn't matter what time frame you're trading or what markets you're treating you're definitely going to experience this at one point or another and then we talk about where will the pullback potentially end right I share with you three instances where the probit usually end either it's support or resistance right support in an uptrend resistance in a downtrend or back towards a moving average or back towards a trendline right these are the three common scenarios where the market tends to pull back into and last but not least we talk about how you can treat pullback right I mentioned it I give you three different entry technique you can use to treat it number one right candlestick patterns right like the reversal patterns that you have in candlesticks the pin barn engulfing patterns are patterns that you could look up for number two we talked about the break of trendline right you wait for the market to break the trendline before you enter your position and number three we talked about the break of the structure on the lower timeframe right you wait for a break off structure on the lower timeframe I don't want to write the word structure here but you know there is right break off structure on the lower timeframe so I think this is worth mentioning once more so basically if you have a pullback in a downtrend it looks like this this retracement over here right say for example this is the forward timeframe the one-hour time frame will look something like this right every trace man will have a higher higher lows higher lows higher lows and higher highs so you wait for a lower high and a lower low right before you go and shop the market once more right so this is basically what I meant by the break off structure on the lower timeframe and then we talk about where you could put your stop-loss you could either put your stop-loss above the current swing height or at the previous swing high right so this is basically you know how you casually go about trading pullback it's not an exact trading strategy for you to use but is to give you all the different possibilities like the important stuff that you need to consider before you want to trade pullback so I hope this really gives you a good insight into how you can actually trade pullback in your trading career so with that right I've come to the end of today's video if you've enjoyed it feel free to hit the subscribe button below so you always stay updated right and lastly if you have any questions or feedback feel free to let me know in the comment section below right with that I wish you good luck and good trading talk to you soon

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